The amount of capital to invest in the Company is one of the most critical decisions that have to be made by the members/directors when a company is in its incorporation stages. As the business begins to pick up, the company may look to expand its operations, expand in size, scale, or structure. To do all this, it may require the driving of more funds into the company, basically increasing/changing the share capital of the company.
The word “share capital” of the organization where the rupees divided into a predetermined number of shares of a fixed amount. Every company requires cash in the form of share capital to maintain the business.
The company which has chosen for expanding its capital, first it has to check the current Authorized Share capital. The company can change the share capital by increasing the authorized capital by changing the MOA of the company.
The company having Share Capital if so authorized by the AOA, can modify the Share Capital after the approval of ROC by filing required forms.
- Share Capital is a privilege to a predefined amount of the share capital, carrying with its specific rights and liabilities.
- Share Capital is recognized by its number, though this provision will not have any significant impact to a share held by an individual whose name is entered as the holder in the record of a depository.
- As well, a share of any part in an organization is a movable property transferable in the way mentioned in the AOA of the company.
As provided in section 61 of the Companies Act, 2013 different types of change in share capital are associated:
- Increase in Authorized Share Capital.
- Combination and division of all or any of the share capital into shares of bigger amount than existing share.
- Convert all or any of its completely settled up shares into the stock and re-convert that stock into the completely settled up portions of any division.
- Sub-Division of its shares, into the portions.
- The reduction of shares.
- Announcement of EGM with the descriptive statement.
- Duplicates of the resolution delivered at the general meeting of the associates.
- Modified MOA
- Modified AOA
- A valid certified copy of Board resolution for alteration in AOA.
- A valid certified copy of Board resolution for alteration in MOA.
- A valid certified copy of Shareholders resolution.
- Duplicates of audited balance sheets for the past 3 years.
- Resolution for permitting such consolidation or division and providing explanation for the equivalent.
- Credentials in proof of new capital arrangement and class of shares presented consolidated or divided.
- Affidavit authenticating the petition.
- Bank draft substantiating payment of request fee.
- The implemented Memorandum of appearance with a copy of the Board’s Resolution whatever is available as per requirement.
- Two additional duplicates of the application.
- Any other application documents.
- A company may, during its course of business operation require additional capital for expansion or capital requirements etc. The process of changing share capital is a complicated and time-consuming as it requires permission of ROC and other legal formalities.
- But there is nothing to worry about. This is what exactly ASA is for, to help you ease these complicated processes.
- ASA experienced professionals will assist you to plan seamlessly at the best cost. Our team of experts is well aware of all the legal formalities and necessary documents required.
- We ensure the successful completion of the process.